Traffic flows under the rusting railroad overpass on Turner Street in Auburn on Wednesday afternoon. Maine is receiving a $17 million federal grant that will go toward modernizing 75 miles of a Pam Am Railways line in Central Maine that runs through Lewiston and Auburn. Russ Dillingham/Sun Journal

LEWISTON — State transportation officials and Pan Am Railways are teaming up on a $35 million project to upgrade a large section of freight rail line between Waterville and North Yarmouth, which passes through Lewiston and Auburn.

The project is the result of a $17 million federal grant, which Pan Am agreed to match, that will modernize 75 miles of track.

According to Nathan Moulton, director of the Office of Freight and Business Services for the Maine Department of Transportation, the project is focused on freight rail and is not related to any passenger rail proposals, including a recently-completed passenger rail study in Lewiston-Auburn.

A project outline by the Maine Department of Transportation from Moulton states the upgrades are designed to improve safety, efficiency and reliability, and will benefit local industries by alleviating higher trucking costs.

According to the project summary, the work will replace 37 miles of rail, upgrade 25 switches, upgrade 47 rail crossings, extend and upgrade existing siding, replace signal systems and replace bridge deck timbers on eight rail bridges.

About 25 percent of the project funding will be spent on upgrades to Lewiston sections of the line, according to the summary.

The grant is part of $326 million in Federal Railroad Administration grants awarded last month to support railroad infrastructure, funding 45 projects in 29 states. More than one-third of the funds were awarded to rural projects, including those in Maine.

The section of rail runs from Waterville through Oakland, Belgrade, Monmouth, Greene, Lewiston, Auburn, New Gloucester and North Yarmouth.

Moulton said Wednesday that MDOT is finalizing the grant documents with the Federal Railroad Administration, and the goal is to begin ordering materials over the winter with construction starting next spring.

The estimated construction budget is $35.5 million, split evenly between the Federal Railroad Administration and and Pan Am Railways.

According to the MDOT grant application, the revitalization work along the Pan Am mainline “will provide this region with increased employment opportunities for local citizens and over time will bring in new customers that invest money into the local economy.”

The application specifically points to industries such as paper mills and Poland Spring Water Co., which are, among other products, major freight customers of Pan Am.

The MDOT application states that pulp and paper products, lumber, wood and water are the primary commodities originating in Central Maine. They combine for more than 30% of Maine’s exports overall and 96% of originating rail traffic in Maine.

A van crosses railroad tracks on Spring Street in Auburn on Wednesday afternoon. Maine is receiving $17 million in federal grants that will go toward modernizing 75 miles of a Pam Am Railways line in Central Maine that runs through Lewiston and Auburn. Russ Dillingham/Sun Journal

Pan Am is projecting 2.4% growth annually in the paper business and 9% growth annually in the water business, according to the application. The higher volumes projected as a result of the project will lead to the addition of 13 full-time equivalent employees by 2025, it states.

“This rail project supports the economic vitality of Maine by ensuring that the paper mills and Poland Spring Water have reliable rail transportation to move out of Maine either to other parts of the United States or to Canada,” the application states.

This section of Pan Am line was also used as the basis of the recent passenger rail study in Lewiston-Auburn, which looked at the feasibility of connecting Lewiston-Auburn to the Amtrak Downeaster in Portland.

Of the proposals laid out in the study, the least expensive route would be the Pan Am rail alignment, which would result in a 50-minute ride to the Portland Transportation Center and could cost between $189 million and $230 million to construct.

Bob Stone, a member of the Lewiston/Auburn Passenger Rail Service Plan Committee, which disbanded after it released a final report this spring, said the federal grant to upgrade the Pan Am line was not on the committee’s radar.

He said establishing passenger rail on the corridor would be a completely different undertaking, and that the freight upgrades, while beneficial, are still a long way from making the line ready for passenger rail.

“It’s a separate issue at this point,” he said.

However, he said part of the proposal that will expand track siding could lower the costs for passenger rail “to some degree.”

The MDOT project will extend an existing siding in New Gloucester by 4,800 feet and modernize the remainder of the siding so longer trains can meet and pass in the corridor.

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